With Market Valuations High, Investors Take A Breather Ahead Of Friday’s Jobs Report

With Market Valuations High, Investors Take A Breather Ahead Of Friday’s Jobs Report

Key Takeaways:

It seems that a holding pattern may be developing in the stock market ahead of Friday's closely-watched employment report.

On the one hand, earnings season continues to be better than expected, the vaccine rollout is engendering more optimism, the number of new Covid-19 cases in the United States is retreating, investors are expecting more government stimulus, and economic data has been looking up.

At the same time, there seems to be concern about high valuations in the market, meaning that stocks don't necessarily move higher even if their companies beat expectations. It seems that investors and traders may be waiting for another catalyst to move the market meaningfully higher.

We've also seen a lot of movement in stocks this week, and today might be a reset day where investors and traders catch their breath and get their bearings.

Getting Focused

The market is returning its focus to fundamentals, like economic data, after the non-fundamental hubbub surrounding short squeezes. On that note, the weekly jobless claims number“”which has been a closely watched barometer of economic health during the pandemic“”was quite a bit better than expected. Initial claims came in at 779,000 when a Briefing.com consensus had expected 825,000.

As earnings season rolls along, top- and bottom-line beats